Talbot v. AeroTrans

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Dennis W. Talbot,
Plaintiff and Appellant,

v.

AeroTrans Corporation, a Utah corporation;
Kelley M. Barnett; Jack Dykstra; and Candy Dykstra,
Defendants and Appellees.

MEMORANDUM DECISION
(Not For Official Publication)

Case No. 981754-CA

F I L E D
February 17, 2000
  2000 UT App 39 ----- Third District, Salt Lake Department
The Honorable Homer F. Wilkinson

Attorneys:
Craig A. Hoggan, Craig G. Adamson, and Eric P. Lee, Salt Lake City, for Appellant
Alan C. Bradshaw, Karen Martinez, and Milo S. Marsden, Salt Lake City, for Appellees

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Before Judges Greenwood, Jackson, and Davis.

DAVIS, Judge:

Plaintiff Dennis W. Talbot appeals the trial court's grant of summary judgment in favor of defendants AeroTrans, Kelley M. Barnett, and Jack Dykstra. We affirm.

Because summary judgment resolves only questions of law, we review a trial court's grant of summary judgment for correctness, "according 'no deference to the trial court's legal conclusions.'" Richards v. Security Pac. Nat'l Bank, 849 P.2d 606, 608 (Utah Ct. App. 1993) (citation omitted). "When reviewing a grant of summary judgment, we review the record, including all inferences arising therefrom, in the light most favorable to the party opposed to the motion." Id.

ANALYSIS
1. Temporary Restraining Order and Preliminary Injunction

Talbot argues that summary judgment was inappropriate because the trial court abused its discretion by dissolving the temporary restraining order and denying his motion for a preliminary injunction. Talbot contends that his "delay in making the escrow deposit when and how AeroTrans dictated was not a material failure excusing AeroTrans'[s] performance." Talbot further maintains that even if the delay were material, he "made a timely effort to cure which was wrongly rejected by AeroTrans."

The Dykstras' offer, the terms and conditions of which Talbot was indisputably contractually bound to match, provided: "To show your ability to proceed with the Acquisition, the entire Purchase Price must be placed into escrow with a party reasonably approved by AeroTrans, no later thanSaturday, November 30, 1996." (Emphasis added.) When Talbot exercised his right of first refusal on November 27, 1996, he stated that he was "prepared to make such a deposit with the understanding that the purpose of the deposit [was] solely to demonstrate [his] ability to proceed with the acquisition." Notwithstanding his assurance that he was ready to move forward, Talbot failed to make the required deposit. The failure was admittedly due to a "continuing problem with one portion of the security for the loan."

As a result of Talbot's inability to escrow the funds on the required date, he filed this action and a motion for a temporary restraining order, representing to the trial court that "[o]n November 30, 1996, Talbot was ready, willing and able to deposit the $720,000.00 purchase price into escrow." The trial court granted Talbot's motion for a temporary restraining order and entered the following order: As a condition of entry of this order, Talbot must deposit $720,000 in immediately available funds into the following account: Holme, Roberts & Owen trust account, Zions Bank [account] No. 03148533, ABA Routing No. 124-000054 Third South and Main Branch, and failure to make such deposit by 12:00 Noon, December 9, 1996 shall result in dismissal of this order. Said deposit shall be held pursuant to the terms of the October 28, 1996 offer letter. (Emphasis added.)

The undisputed facts show that Talbot failed to meet the new deadline he obtained from the court. Instead, forty-five minutes after the court-ordered deadline, counsel for UTCO delivered to Holme Roberts & Owen a check drawn upon UTCO's counsel's trust account for the $720,000. On that basis, the trial court determined that Talbot had failed to comply with the trial court's explicit instructions and therefore dissolved the temporary restraining order and denied Talbot's motion for a preliminary injunction.

On appeal, Talbot argues that his failure to deposit the funds into the escrow account was not a material breach excusing AeroTrans's performance, and that the tender of the check was a sufficient tender curing any material failure on Talbot's part. We disagree.

Talbot argues that AeroTrans wrongly repudiated Talbot's exercise of his right of first refusal when, on December 2, 1996, it told Talbot that because of his failure to deposit the funds, AeroTrans was going to sell the WindJet assets to the Dykstras. A right of first refusal is in the nature of an option contract; once the seller decides to sell, then the "optionee [has] the first right to purchase upon [the seller's] terms." Weber Meadow-View Corp. v. Wilde, 575 P.2d 1053, 1055 (Utah 1978). "But the decision as to both the time and the terms upon which the optionor would sell her property remains her exclusive prerogative so long as she acts in good faith and without any ulterior purpose to defeat the right of the optionee." Id.; accordPrince v. Elm Inv. Co., 649 P.2d 820, 824 (Utah 1982). "Utah courts have consistently held that an option to purchase must be strictly exercised according to its terms." Mills v. Brody, 929 P.2d 360, 366 (Utah Ct. App. 1996) (Wilkins, J., dissenting). Because Talbot failed to strictly comply, and admittedly could not comply until a later date, with AeroTrans's terms, it did not breach any duty owed to Talbot.

Further, "'the party who desires to use legal process to exercise his legal remedies must make a tender of his own agreed performance in order to put the other party in default.'" PDQ Lube Ctr., Inc. v. Huber, 949 P.2d 792, 799 (Utah Ct. App. 1997) (citation omitted). "Where tender into court is required as a prerequisite of specific performance,[(1)] that tender, as with all tender, must be made without condition and must evidence a willingness and readiness to perform." LHIW, Inc. v. DeLorean, 753 P.2d 961, 963 (Utah 1988).

Talbot argues that he substantially performed by tendering the check drawn off UTCO's counsel's trust account. However, Talbot undisputably never performed either under the terms of the Dykstra offer or the temporary restraining order. Both required Talbot to deposit $720,000 into AeroTrans's counsel's trust account. Talbot never made either required deposit.

Talbot maintains that the tendered check cured any failure on his part to deposit the check into the trust account. "It is . . . a general rule that a check is not legal tender as against an objection duly made." Griffeth v. Zumbrennen, 577 P.2d 129, 131 (Utah 1978). Both the trial court and AeroTrans made clear that, to be acceptable, the funds were to be in the form of a deposit to the trust account in immediately available funds. Thus, Talbot's argument fails.

Talbot also contends that the fact that he was forty-five minutes late had no bearing on the transaction because the parties did not agree that time was of the essence.(2) The Dykstra agreement provided that the deposit was to be made "no later than Saturday, November 30, 1996." The court's order provided that any "failure to make such deposit by 12:00 Noon, December 9, 1996 shall result in dismissal of this order." Clearly, both evidenced that time was of the essence. See Griffeth, 577 P.2d at 131 (holding provision requiring payment "on or before June 6, 1975, connote[d] that time was of the essence").

Talbot argues that he was prevented from performing the escrow requirement because AeroTrans withheld due diligence information. However, in his November 27 acceptance letter, Talbot said he was prepared to make the deposit, and he represented to the court that on November 30, he was ready, willing and able to make the deposit. Finally, Talbot admitted in his brief that the reason he was unable to deposit the funds into the escrow account was because of a "continuing problem with one portion of the security for the loan."(3) Thus, we find this argument meritless and do not address it further.

Because Talbot wholly failed to perform, his "failure or inability to perform is thus sufficient justification to deny an equitable remedy." DeLorean, 753 P.2d at 963; cf.Coalville City v. Lundgren, 930 P.2d 1206, 1210 (Utah Ct. App. 1997) ("He who comes into a court of equity must come with clean hands.") (citations and internal quotation marks omitted). We therefore hold that the trial court did not abuse its discretion by dissolving the temporary restraining order, denying Talbot's motion for a preliminary injunction, and granting summary judgment against him on these issues. See Aquagen Int'l, Inc. v. Calrae Trust, 972 P.2d 411, 412 (Utah 1998) (stating reviewing court will not disturb trial court's ruling on an injunction "unless the court abused its discretion or rendered a decision clearly against the weight of the evidence").

2. Genuine Issues of Material Fact

Talbot also argues that summary judgment was inappropriate because there were genuine issues of material fact regarding whether AeroTrans offered the Dykstras more favorable terms than Talbot, thereby breaching Talbot's right of first refusal. Talbot lists two instances in which he believes the Dykstras received more favorable terms. First, Talbot argues that the Dykstras had additional time within which to complete its due diligence. While it may be true that the Dykstras were given access to certain documents before October 28, when Talbot was entitled to begin his due diligence, this was before the Dykstras made an offer to purchase and therefore before AeroTrans was obliged to extend any due diligence to Talbot.

Additionally, Talbot claims that a "side agreement in which AeroTrans agreed to reimburse [the] Dykstra[s] 'for documented out-of-pocket expenses' incurred by [the] Dykstra[s] 'if AeroTrans for any reason refuses to close once the Acquisition Agreement is executed'" evidences more favorable treatment to the Dykstras. However, this "side agreement" does not relate to Dykstras's offer to purchase, which required AeroTrans to offer the same "price and on terms no less favorable than those to be offered to [Dykstra]" to Talbot, but related to an agreement if no sale occurred. Accordingly, we reject Talbot's argument that he has raised a genuine issue of material fact regarding whether he was treated less favorably than the Dykstras.

3. Tortious Interference Claim Against Barnett and Mandatory Injunction Claim Against Dykstra

Talbot argues that the trial court erred by granting summary judgment in favor of Barnett and Dykstra. The trial court ruled that because Talbot failed to substantially perform, AeroTrans did not breach any duty to Talbot and, therefore, Talbot's claims against both Barnett and Dykstra fail. We agree and affirm the trial court's grant of summary judgment on this issue.

Additionally, even if the trial court's ruling was in error, Talbot has failed to provide this court with a legal analysis on either his tortious interference claim against Barnett or his mandatory injunction claim against Dykstra. Talbot has not discussed or cited any authority regarding either legal theory upon which he relies. See Utah R. App. P. 24(a)(9). Accordingly, we reject Talbot's arguments on this additional basis.

CONCLUSION

The trial court's dissolution of the temporary restraining order against AeroTrans and its denial of Talbot's motion for a preliminary injunction was well within its discretion. The trial court also correctly granted summary judgment in favor of Barnett and Dykstra.

Affirmed.
 
 
 
 

______________________________
James Z. Davis, Judge -----

WE CONCUR:
 
 
 

______________________________
Pamela T. Greenwood,
Presiding Judge
 
 
 
 

______________________________
Norman H. Jackson,
Associate Presiding Judge

1. Although Talbot sought both a preliminary and permanent injunction in his December 5, 1996 Complaint, the nature of the relief he was seeking was specific performance. Talbot sought a judgment preventing AeroTrans from selling the WindJet assets to anyone except Talbot.

2. Talbot apparently assumes that a check drawn on the trust account of UTCO's counsel is somehow the equivalent of placing the purchase price in escrow and/or a "deposit . . . in immediately available funds." See Securities & Exch. Comm'n v. Miller, 495 F. Supp. 465, 469 n.14 (S.D.N.Y. 1980) ("Ordinary checks are not 'immediately available,' since they usually take several days to clear.").

3. The security was evidently real estate in St. George, Utah unrelated to the WindJet assets.